Insurance Regulatory and Development Authority of India notified Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) (Amendment) Regulations, 2026, with:
- Mandatory adoption of Indian Accounting Standards (Ind AS) from 1 April 2026
- Applicable to all insurers: Life, General, Stand-alone Health, and Reinsurers
- Transition from historical cost accounting to fair value accounting under Ind AS 117 (aligned with IFRS 17)
This reform aims to enhance transparency, comparability, and global alignment in the insurance sector.
Key Features of New Regulations
Adoption of Ind AS Framework
Insurers must prepare financial statements as per Ind AS, covering:
- Recognition and measurement
- Presentation and disclosure norms
This aligns Indian insurance accounting with global best practices (IFRS framework).
Shift to Fair Value Accounting
- Moves from historical cost to fair value measurement
- Assets and liabilities reflect current market conditions
- Improves transparency but may introduce balance sheet volatility
Parallel Reporting (Transition Mechanism)
- Dual reporting for 2 years (Ind AS + existing framework)
- Helps insurers adapt systems and processes
- Enables stakeholders to assess the impact of the transition
Forbearance Provision
- Insurers facing challenges may get 1-year relaxation
- However, they must still submit Ind AS-based financial data to IRDAI
About Indian Accounting Standards (Ind AS)
Ind AS are IFRS-converged accounting standards issued by ICAI under the Ministry of Corporate Affairs.
- Implemented from 2016–17
- Applicable to listed companies and firms with net worth ≥ ₹250 crore
- Aim to ensure high-quality, transparent, and globally comparable reporting
Key Features of Ind AS
- Fair value accounting (market-based valuation)
- Emphasis on substance over form
- Enhanced disclosures (financial instruments, risks)
Important Standards:
- Ind AS 1 (Presentation of Financial Statements)
- Ind AS 115 (Revenue)
- Ind AS 116 (Leases)
- Ind AS 12 (Income Taxes)
Ind AS v/s IFRS
- Asset Revaluation: IFRS allows wider flexibility than Ind AS
- Impairment Testing: Ind AS uses a two-step approach, IFRS uses one-step
- Includes India-specific carve-outs for domestic conditions
About IRDAI
The Insurance Regulatory and Development Authority of India:
- Established under IRDAI Act, 1999
- Autonomous body under the Ministry of Finance
- Headquarters: Hyderabad
Composition:
- Chairman
- 5 full-time members
- 4 part-time members
Functions:
- Regulate and develop insurance sector
- Protect policyholders’ interests
- Ensure financial stability and solvency of insurers
- License insurance companies and intermediaries